Iran’s reported gas halt to Turkey exposes limits of its energy power

A local police commander said six Starlink devices were seized and six people detained following searches carried out with judicial approval.

Authorities accused the suspects of trading access to the service, sharing information with foreign-based outlets and engaging in activities deemed hostile. The individuals were referred to prosecutors, police said.

The move comes amid a broader wave of arrests across Iran, with authorities detaining dozens in recent days on security-related charges, including alleged links to militant activity, contacts with foreign media and online activity. Officials have also reported seizing weapons, explosives and Starlink devices in multiple provinces.

Starlink is banned in Iran, where authorities have imposed a near-total internet blackout during the war. Monitoring group NetBlocks says connectivity has dropped to around 1% of normal levels, leaving satellite services among the few ways to access the global internet.

Over the past year, a pattern has emerged across markets, policy decisions and price behavior pointing to the early stages of de facto dollarization.

In April 2025, when a “five-dollar pizza” shop opened in Tehran’s affluent Niavaran neighborhood, many dismissed the fixed dollar price as a marketing gimmick. At the time, one pizza cost roughly 5 million rials, with inflation reportedly above 40%.

Less than a year later, on the eve of the current war, the same pizza was priced at 8.6 million rials, while officials acknowledged inflation exceeding 70%. What initially appeared symbolic began to look practical.

The shift was not confined to niche businesses and high-end stores. Informal dollar transactions, once largely limited to luxury goods or services aimed at foreign customers, steadily expanded.

In the months leading up to the 12-day war, despite the departure of many foreign nationals, dollar-pegged property sales and rentals increased noticeably. While upscale properties led the trend, mid-range apartments also entered the market with dollar-based pricing.

By the end of 2025, the US dollar had climbed to 1,430,000 rials, up from 800,000 in January of the same year. The volatility hit the automotive market hard. With car production concentrated among three major state-linked manufacturers and supply unable to meet demand, the price of second-hand cars in rial terms outpaced the increase in the dollar exchange rate.

Media headlines read, “The dollar is in the driver’s seat,” and traders increasingly priced vehicles in dollars. In December, automobile market expert Abdollah Babaei warned that if current trends continued, car transactions would effectively become dollarized.

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  Stealth austerity: Tehran seeks fuel price hike without a reckoning

Economists began warning of a structural shift. Former Tehran Stock Exchange chief Hossein Abdeh Tabrizi cautioned that Iran "will enter the stage of dollarization" if 60% inflation and government overspending continued.

he statement went viral, and many echoed the growing concern that “Iran’s economy is on a dangerous path,” with the rial losing its function both as a store of value and as a unit of account.

Government policy after the 12-day war reinforced these anxieties.

The administration’s 2026–2027 budget introduced three pivotal shifts. First, gasoline subsidies moved from a liter-based rationing system to cash transfers. Second, an inflation coefficient was added to the pricing formula of Iran’s key commodity anchor. Third, the preferential exchange rate was abruptly removed in December, converting the government’s largest dollar commitment into rial-based direct subsidies.

Perhaps most striking was the historic decline in oil revenue’s share of the budget—from about 32% in 2025–2026 to just 5% in 2026–2027, the lowest level since the 1960s.

To compensate, taxes were increased by more than 60%. Across these measures, the common denominator was clear: the state systematically reduced its foreign-currency and commodity obligations, converting them into rial-based commitments. The administration that campaigned on taming inflation now appeared increasingly reliant on inflationary financing to navigate wartime pressures.

• 

  Capital flees Tehran stocks as geopolitical tensions deepen

In February, before the outbreak of the second war, average inflation for basic necessities reached triple digits, estimated between 105% and 115%. Reacting to these concerns, the administration pushed to remove four zeros from the rial, presenting it as a technical reform to simplify calculations.

In reality, redenomination in a high-inflation environment is an expensive cosmetic surgery on a patient on his deathbed—an adjustment that quickly loses meaning as prices continue to rise.

During the second war, market closures, the suspension of price discovery in the exchange market, and reduced demand slowed money circulation and provided short-term inflationary relief. At the same time, large banks halted operations, increasing demand for physical cash.

The Central Bank responded by issuing a 10-million-rial banknote—raising the highest denomination one hundredfold from 100,000 rials—a step it had resisted for years.

But such pauses rarely eliminate underlying pressures. When markets fully reopen and normal trading resumes, deferred demand for foreign currency is likely to return. A similar pattern followed the 12 day war, when pent-up demand translated into a rapid adjustment in prices once restrictions eased.

Even under conservative assumptions, inflation could move decisively into triple-digit territory if monetary expansion continues. At that point, the shift toward dollar pricing would no longer be limited to select sectors. It would spread more systematically across contracts, wages and savings behavior.

Dollarization rarely begins with legislation; it begins with economic self-preservation. It starts with a pizza menu, moves to apartment contracts and car listings, and eventually reshapes fiscal expectations.

If post-war reopening triggers another inflationary wave, the timeline may not be measured in years but in quarters. Under such conditions, the transition toward de facto dollarization would become increasingly difficult to reverse.

“No imminent threat,” declare the sceptics. “An illegal war,” they insist. Such phrases betray a profound misunderstanding of history and responsibility. They treat sovereignty as a shield for aggression and “imminence” as a stopwatch that only starts once the warhead is in flight. We in the region’s Arab states—Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, Qatar and Oman—ought to know better. We have lived with the Iranian threat for forty-seven years.

Since the 1979 revolution, the Islamic Republic has pursued a doctrine of exportable upheaval with methodical persistence. It has armed, trained and directed a transnational network of proxies that stretches from the Levant to the Horn of Africa, from the streets of Baghdad to the tri-border region of South America, and onward into Asia.

Hezbollah in Lebanon, the Houthis in Yemen, the various militias of Iraq’s Hashd al-Shaabi, and a constellation of smaller but lethal affiliates have served not as rogue actors but as calibrated instruments of Tehran’s will.

These groups have sown chaos on a truly global scale: the 1983 bombings of the U.S. Embassy and Marine barracks in Beirut, which killed 304 people—including 241 American servicemen and 58 French paratroopers—in the deadliest terrorist attack on Americans until 9/11; the 1992 bombing of the Israeli Embassy in Buenos Aires and the 1994 truck-bomb attack on the AMIA Jewish community centre, which together claimed more than 114 lives in Argentina’s deadliest terrorist outrage; the 1996 Khobar Towers bombing in Saudi Arabia that killed 19 American airmen; the supply of explosively formed penetrators that killed and maimed hundreds of U.S. and coalition troops in Iraq after 2003; the 2011 plot to assassinate the Saudi Ambassador in Washington; the 2019 Aramco strikes; and the relentless campaigns against international shipping in the Red Sea and the Gulf of Oman.

These are not isolated incidents but chapters in a single, uninterrupted strategy of regional domination and global subversion.

Qassem Soleimani, slain Quds Force commander and architect of the “Axis of Resistance,” openly boasted of this empire. In a message to his American counterpart he declared: “Dear General Petraeus, you should know that I, Qassem Soleimani, control the policy for Iran with respect to Iraq, Lebanon, Gaza and Afghanistan.” That assertion, with the regime’s repeated claims of commanding an “Axis of Resistance” spanning multiple Arab capitals, reveals Tehran’s long-standing ambition for hegemony across the region and into the eastern Mediterranean.

To dismiss this record as lacking “imminence” misunderstands the concept in the nuclear age. A responsible leader does not wait until the missile is on the launch pad and the warhead mated. As former Israeli Prime Minister Naftali Bennett observed in his recent interview with Christiane Amanpour, “responsible leaders… if you wait for the threat to be imminent, it is too late.”

Ethically, this position is anchored in the just war tradition. As Michael Walzer demonstrates in his seminal work Just and Unjust Wars, states—like individuals—have the moral right to defend themselves against violence that is imminent but not yet actual. “For aggression often begins without shots being fired or borders crossed. Both individuals and states can rightfully defend themselves against violence that is imminent but not actual.” Waiting for the first blow when an adversary possesses both declared intent and advancing nuclear capability is not moral prudence; it is moral abdication.

Iran possesses both the technical capability—advanced uranium enrichment, ballistic-missile production lines, and a clandestine weapons programme long documented by the IAEA—and the explicit intent, voiced repeatedly by its supreme leader and Revolutionary Guard commanders. Add to this an extensive missile arsenal capable of reaching every capital of the surrounding region and beyond, and the calculus changes. Imminence, in the nuclear age, is not a matter of hours but of irreversible momentum.

Nor is the charge of illegality sustainable. Critics invoke Article 51 of the UN Charter, which authorises self-defence “if an armed attack occurs.” Yet the Charter itself describes this right as “inherent,” a pre-existing principle of international law that has always encompassed anticipatory action when the necessity is clear and the danger existential.

The classic precedent remains the 1962 Cuban Missile Crisis. President Kennedy imposed a naval quarantine on Cuba to prevent Soviet nuclear missiles from becoming operational—acting before any launch, not after. No credible legal authority has ever branded that decisive intervention unlawful. The same logic governs here. Iran’s decades-long pattern of armed attacks, direct and by proxy, combined with its nuclear advances, satisfies every test of necessity and proportionality under international law.

General Jim Mattis, in his Firing Line interview, dismantled the illegality argument with the clarity of a commander who confronted this threat for decades: one could “probably never make a charge that this is an illegal war” given Iran’s long pattern of direct and proxy assaults on its neighbours, on American forces and on allied interests across the region.

These are not hypothetical grievances; they are a documented record of aggression that previous administrations, through sanctions that proved porous and diplomacy that proved naïve, allowed to fester. The result was not peace but emboldenment.

We in the region did not seek this war, nor did we initiate it. For years we counselled against military confrontation, exercising a restraint that has exceeded even our critics’ expectations. We did so not from illusion but from a pragmatic assessment of the risks: the sudden collapse of the current theocracy, absent any ready alternative, could plunge Iran into civil war, unleashing waves of refugees, radicalism and instability across our borders. Its ballistic-missile arsenal and deeply entrenched proxy networks might fracture into even more dangerous splinter groups, turning a contained threat into a hydra of uncontrolled violence.

Today, we absorb provocations — drone swarms, missile barrages, economic sabotage — against a history of flagrant aggression that had justified retaliation long ago. Yet we are pursuing every diplomatic channel precisely to avert such chaos.

Nonetheless, let there be no mistake: when the Islamic Republic turned its weapons directly and unprovoked against neighbouring territory, our shipping lanes and our citizens, the calculus shifted. Unlimited restraint is no longer prudence; lest it be confused with surrender. The gloves have come off because the alternative — endless appeasement of an aggressor that has already crossed every red line — poses the greater peril.

The campaign now under way is neither precipitous nor unlawful. It is the overdue correction of a strategic imbalance that earlier hesitancy only worsened. It is unfashionable, in some quarters, to acknowledge that President Trump has done what multiple preceding administrations—Republican and Democrat alike—would not or could not. Decades of half-measures allowed Iran’s nuclear programme to advance, its proxy empire to entrench itself, and its ideology of resistance to metastasise.

The cost has been borne disproportionately by the peoples of the region, by the Lebanese and Yemenis caught in proxy crossfire, and by Israelis living under the perpetual shadow of annihilation. To pretend otherwise is to rewrite history in real time.

The states of the region stand ready, as always, for a stable and prosperous Middle East free of hegemonic ambition. We seek no wider conflagration. But we will not feign blindness to the threat that has defined our security landscape for nearly half a century.

True legality and true responsibility lie not in waiting for the perfect casus belli to arrive gift-wrapped in a mushroom cloud, but in acting when the evidence of capability, intent and historical conduct is overwhelming. Iran’s revolution exported war; the present campaign seeks, at long last, to contain it. The states of the region understand this. The world ought to listen.

Accounts from multiple cities describe a pattern of increased checkpoints, armed deployments and organized nightly gatherings, with many residents saying the measures appear aimed at controlling the population rather than addressing external threats.

Witnesses said checkpoints have been set up across urban areas, often staffed by masked security personnel and Basij volunteers, some described as very young.

Vehicles carrying heavy weapons, including machine guns, have been stationed at major intersections, with officers pointing weapons toward passing cars.

“Many of them are very young, some as young as teenagers,” one resident said, adding that “the feeling for me and many others is fear.”

Residents said the checkpoints have disrupted daily life, causing heavy traffic and repeated stops. Some described being questioned without clear cause, while others said their phones were searched.

“It feels like they are looking for any small excuse to harass people or even arrest them,” a resident said.

Reports of such measures have come not only from major cities but also smaller towns, where residents described patrol vehicles moving through streets with mounted weapons.

In one account, security forces were said to require drivers to turn off their headlights when entering checkpoints.

Nightly pro-government rallies

Alongside the security presence, residents reported nightly pro-government gatherings in many cities, often involving convoys of vehicles, loudspeakers and armed escorts.

In several locations, groups of supporters were seen moving through streets broadcasting slogans such as “Death to America” and “Death to Israel,” while others chanted religious slogans at high volume.

Residents said the gatherings often continued late into the night or early morning hours.

“These gatherings create more anger than fear,” one resident said, adding that even small groups were accompanied by armed personnel.

Others described loudspeakers mounted on vehicles or in neighborhoods broadcasting chants and songs through the night. “They disrupt the entire neighborhood,” a resident said, describing noise that continued into the early hours.

Some residents said the gatherings included participants wearing symbolic clothing and issuing verbal threats, while others reported that passing cars were stopped and checked if occupants were seen using mobile phones.

Across multiple accounts, residents described the measures as coordinated and sustained over recent weeks, coinciding with intensified military activity in the region.

“There is a clear pattern in how these actions are carried out at night,” one source said, adding that the focus appeared to be on “creating fear and preventing any form of protest.”

While state media has highlighted military activity and messaging around national defense, residents said their primary concerns remain daily living conditions and personal safety.

“We are struggling to get by,” one resident said. “People are worried about their lives, not these displays.”

The 47-member council adopted by consensus a motion brought by Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates and Jordan, decrying Iran’s “unprovoked and deliberate” attacks, calling on Tehran to immediately cease them and demanding full and swift reparations for victims.

Kuwait’s ambassador, Naser Abdullah H. M. Alhayen, told the Geneva-based council that Persian Gulf states were confronting “an existential threat to international and regional security” and said Iran’s actions were undermining international law and sovereignty.

The United Arab Emirates’ ambassador, Jamal Jama al Musharakh, said Iran was attempting to destabilize the international order through “reckless adventures of expansionism.”

The resolution came during an emergency session on the widening regional conflict, in which regional states, the European Union and ASEAN members condemned Iran’s attacks in the Persian Gulf and the Strait of Hormuz.

UN High Commissioner for Human Rights Volker Turk warned that the conflict could draw in countries around the world on an unprecedented scale and urged influential states to use all available means to help end the war.

He said: “Attacks on civilians and civilian infrastructure must end. If they are deliberate, such attacks may constitute war crimes.”

Iran defended its actions and said more than 1,500 civilians had been killed in US-Israeli strikes so far.

Iran’s ambassador to the UN in Geneva, Ali Bahreini, said: “We fight on behalf of all of you against an enemy that, if not restrained today, will be beyond containment tomorrow,” referring to Israel.

Oman, one of the sponsors of the resolution and a previous mediator between Washington and Tehran, was among the few states to note that US-Israeli strikes had preceded Iran’s retaliation.

Ambassador Idris Abdul Rahman Al Khanjari said those strikes “were the spark that ignited the escalation currently affecting the region and the consequences are threatening states and their vital economic interests and their security and stability.”

The council’s motion also asked the UN rights chief to monitor the situation. An independent rights group, the International Service for Human Rights, cautioned against “selective outrage” and called for scrutiny of abuses by all sides.